Smiths Interconnect Investor Day · 2019. 9. 16. · Smiths Interconnect: providing specialist...

© 2010 by Smiths Interconnect: Proprietary Data | 1

Smiths Interconnect Investor DayTampa, 22nd June 2010

Opportunities to create value


This presentation contains certain forward-looking statementswith respect to the operations, performance and financialcondition of the Group. By their nature, these statementsinvolve uncertainty since future events and circumstances cancause results and developments to differ materially from thoseanticipated. The forward-looking statements reflect knowledgeand information available at the date of preparation of this presentation and the Company undertakes no obligation toupdate these forward-looking statements. Nothing in thispresentation should be construed as a profit forecast.


Peter Turner Finance Director, Smiths Group plc


Observations on Smiths Interconnect: an attractive business model

Leading edge technologies and strong positions in attractive niche markets

Strong underlying growth characteristics

Strong growth track record

Organic growth through consistent investment in research and development

Opportunities for value-enhancing acquisitions in a fragmented market

Margin expansion through self-help and volume growth


Key Themes for Today

3

4

5

6

Outline the business strategy and the key drivers of future growth

Explore Smiths Interconnect’s strong competitive position in its markets

Examine the technology and business model

Demonstrate how we generating value through acquisitions

Visit our manufacturing facility and product demonstrations

Opportunity to meet the management team


Ralph Phillips President, Smiths Interconnect


Welcome to TRAK Microwave, Tampa

From its world-class Tampa facility, TRAK Microwave offers leading-edge design, manufacturing, assembly and testing of high-performance microwave assemblies for mission-critical applications.


Investor Day Agenda

08:30 Presentations

Welcome and Introduction Peter Turner, Finance Director, Smiths Group

Smiths Interconnect Ralph Phillips, President, Smiths InterconnectRoland Carter, Managing Director, ConnectorsKent Whitney, President, Microwave Defence

Break (~ 09.45 for 15 mins)

Presentations continued Jacqui McLaughlin, Managing Director, Microwave TelecomsShawn Thompson, President, ProtectionMike Hansen, VP Finance

10:45 Q&A

11:30 Site Tour and Product Demonstrations

13:00 Buffet Lunch

14:00 Depart for Airport


• A recognised leader in technically differentiated electronic components and sub- systems providing signal, power and microwave solutions.

• Our products connect, protect and control critical systems for the global wireless telecommunications, aerospace, defence, space, medical, rail, test and industrial markets.

Smiths Interconnect


Smiths Interconnect - an attractive investment case

Market leader within specialty electronic and radio frequency products market

*Range of underlying organic growth at constant currency over 3 year period

Entrepreneurial culture plus controls and resources of FTSE100 plc

Margins leveraged to volume growth

Strong track record of creating value, organically and acquisitively

Unconsolidated market providing opportunity for further acquisitions

Smiths Interconnect targets: Sales growth: 6-10%* Margins: 21-23%

Technologically differentiated products addressing high barriers to entry segments

Diverse end markets with strong underlying growth characteristics


Smiths Interconnect overview

Profit growth since 2005 (£m)

Financial performance 2009 Sales £318 mTrading profit £55 mMargin 17.4%

Sales growth since 2005 (£m)Total CAGR = 16.4%; Organic CAGR = 11.0% Total CAGR = 13.1%; Organic CAGR = 8.7%

* Excludes divested business (Times Microwave)


Built through a successful phased acquisition programme

1990

2000

2010 2010 Acquired Interconnect Devices, Inc.2009 Acquired Shenzhen Dowin Lightning Technologies, Channel Microwave2008 Acquired Triasx, Allrizon Communications2007 Divestment of Times Microwave2006 Acquired Lorch Microwave2005 Acquired Farran Technology, Millitech 2004 Acquired TRAK Microwave, TECOM Industries

2002 Established Chinese WOFE2001 Acquired Summitek Instruments2000 Acquired LEA International, EMC Technology,

RF Florida Labs, Radio Waves1999 Acquired Sabritec1998 Acquired Transtector Systems1997 Acquired PolyPhaser1995 Acquired Hypertronics (USA),

Hypertac GmbH (Germany),Hypertac SpA (Italy),Hypertac SA (France)

1989 Acquired Times Microwave

1972 Established Hypertac UK

20052000 20101995

Phase 3 – Mil / AeroMicrowave

Phase 2 – TelecomsProtection & Microwave

Phase 1 – Mil / AeroConnectors & RF Cable

Phase 4 – GlobalisationMicrowave, Protection

& Connectors


Evolution of Smiths Interconnect

Connectors

High reliability interconnect

solutions

Microwave Defence

RF and microwave components, sub-

systems and antenna solutions

Microwave Telecoms

Network optimisation

products and test solutions

Protection

Innovative power and signal integrity

solutions

From individual companies to technology focused cohesive business units

“Technology groups”


Ralph Phillips President

Connectors Roland Carter London, UK

Microwave Defence Kent Whitney Massachusetts, USA

Microwave Telecoms Jacqui McLaughlin Edinburgh, UK

Protection Shawn Thompson Idaho, USA

Operational Functional

Finance Mike Hansen

Human Resources

Legal Counsel Jay Angelo

Strategy / M&A Shaun Caraccio

Information Technology Brian Bark

Investor Director Michael Herlihy

Smiths Interconnect organisation

Resources added as became full division in Aug ‘08 (previously reported through Specialty Engineering division)

Technology Groups combine entrepreneurial culture and responsiveness with controls and compliance of larger business


Military & Aerospace

Wireless Telecoms

Smiths Interconnect fact file

Americas

RoW

• 33 facilities occupying 105,000 sq metres / 1.1m sq. ft. including approximately 25% in lower cost regions

• 4,000 employees; over 35% in emerging economies

• 550 engineers and scientists; over 30% outside US

• 20% employees in customer facing roles

Medical, Rail,Test & Automation

China

EU

Pre-IDI

Post-IDI

Pre-IDI

Post-IDI

Sales by market Sales by geography


Central Team: 10 employees: Leadership / Finance / HR / Legal / Business Development / Projects

ConnectorsHQ UK1700 employees: USA (4 facilities) / UK / France / Italy / Germany / Mexico / Tunisia / India / China

Microwave DefenceHQ Massachusetts840 employeesUSA (5 facilities) / UK / Ireland

Microwave TelecomsHQ UK910 employeesUSA (3 facilities) / UK / Australia / Costa Rica / China (2 facilities)

ProtectionHQ Idaho570 employeesUSA (2 facilities) / Mexico / India / China

Global HQ, Thousand Oaks, California

Total employees 4000 globally, including over 400 R&D engineers

Smiths Interconnect global presence

Irvine, California

Northampton, MassachusettsBillerica, MassachusettsHudson, Massachusetts

Dundee, Scotland

Edinburgh, ScotlandCork, Ireland

London, UK

Saint Aubin Les Elbeuf (nr Rouen)

Deggendorf, Germany

Monastir, Tunisia

Genoa, Italy

Bangalore Shenzhen, China

Shanghai, China

Suzhou, China

Brisbane, Australia

Hayden, Idaho

Minden, Nevada

Fremont, California

Tijuana, Mexico

Salisbury, Maryland

Tampa, Florida

San Jose, Costa Rica

Denver, Colorado

Kansas

Gilbert, Arizona

Stuart, Florida

Tijuana, Mexico

Bangalore

Suzhou, China

Tampa, Florida

Shanghai, China

ProtectionConnectors Microwave Defence Microwave Telecoms


Smiths Interconnect: providing specialist electronics products

Ser

vice

d A

ddre

ssab

le M

arke

t ~ £

6 bn • Engineered solutions

• Technical differentiation

• Highly regulated

• High barriers to entry

• High switching costs

• Less capital intensive

• Value offering

• Long term programmes

Defence Aerospace

SpaceTelecomMedical

Mass TransitSemiconductor

Test & MeasurementIndustrial

IT / ComputerAutomotiveConsumer E

lect

roni

c C

ompo

nent

s M

arke

t > £

100b

n

Commodity Specialist

Multiple / Diverse End Markets varying degrees of “commoditisation”

Specialist Market Characteristics

Strong margins and ROIC


A broad range of technologies for multiple markets

Connectors Microwave ProtectionTechnologies High Spring High speed Components Sub-Systems RF Power/

reliability probes and filtered Signal

Markets

Defence

Civil Aerospace

Space

Network Operators

Infrastructure OEMs

Medical

Rail

Semiconductor

Test & Measurement

Industrial

Oth

erTe

leco

ms

Mil/

Aer

o

Existing presenceOpportunity


Defence market • Situational awareness• Smart weapons• Connectivity and mobility• Force protection

Other markets • Electronics profileration • Leveraging technology• Connectivity and mobility• Globalisation

Market growth drivers

Total market CAGR c. 4-6%

Telecoms market • High data rate applications • Technology refresh rates• Connectivity and mobility• Globalisation

Core markets

2010

~ £6bn

Coremarkets

2013

~ £7bn

"information is power" "everything, everywhere, anytime"

"smart systems"


Core markets: Defence

• Net-centric, battlespace awareness and force protection programmes remain strong - FY2011 C4ISR budget +5%

• Building capabilities of strategic partner nations - projected increases in international defence spending and foreign military sales

$ bns

US DoD Budget

US DoD budget priorities aligned with Interconnect capabilities

(Source: FY2011 President’s Budget documents)


Core markets: Telecoms

• New, faster networks needed to support mobile broadband applications• Network optimisation increasingly critical• Microwave radio links for backhaul• Developing geographies adopting mobile telecommunications

Wireless sector entering next growth phase

Mobile Data Traffic Consumption (Source: ABI Research)


Operating in specialist sectors within unconsolidated markets

Competitive landscape by technology

Connectors Microwave ProtectionTechnologies High Spring High speed Components Sub-Systems RF Power/

reliability probes and filtered Signal

Competitor examples

http://www.google.com/imgres?imgurl=http://www.globalspec.com/CitelAmerica/logo.jpg&imgrefurl=http://www.globalspec.com/datasheets/176/CitelAmerica&usg=__W3wWYzuUkGspwMj21XBJERPixB0=&h=158&w=294&sz=19&hl=en&start=102&itbs=1&tbnid=bxx7cCYmrCefbM:&tbnh=62&tbnw=115&prev=/images%3Fq%3Dcitel%26start%3D84%26hl%3Den%26safe%3Dactive%26sa%3DN%26gbv%3D2%26ndsp%3D21%26tbs%3Disch:1


Connectors Roland Carter


Niche supplier of electro-mechanical and optical interconnect technologies for multiple applications requiring high quality, rugged and reliability solutions

ConnectorsOverview

http://www.google.com/imgres?imgurl=http://procomputing.org/images/boeing787.jpg&imgrefurl=http://procomputing.org/aviation.htm&usg=__lWa82ZA6Es_sdbZhsSnCIq1MXvI=&h=360&w=450&sz=49&hl=en&start=5&um=1&itbs=1&tbnid=KFBcga-P9-AtvM:&tbnh=102&tbnw=127&prev=/images?q=boeing+787&um=1&hl=en&safe=active&sa=N&ndsp=21&tbs=isch:1


High reliability connectors• Two piece connectors utilising hyperboloid contact technology• Broad range of platform products and customer specific solutions• Excellent performance in harsh environments

Spring probe connectors• One piece compression connectors• Highly responsive organisation combined with strong technologists

providing quick turn solutions to customer requirements• Market leading characteristics: size, accuracy and durability

High speed and filter connectors• Customer specific solutions incorporating filter, high speed, fibre optic

and hybrid technology• Strong customer retention and programme positions

ConnectorsProducts and capabilities


Defence

Other

Semiconductor

Medical

Test & MeasurementIndustrial

Aerospace

Rail

Space

Americas

RoW

China

EU

Sales by geography* pro-forma post IDI

ConnectorsLocations, markets and growth drivers

Growth Drivers

• Proliferation of electronics in all end markets• Demand for miniaturisation and higher speeds• Applications getting closer to end user / demand

- more rugged solutions for harsher environments • High reliability electronics integrated into systems to

improve efficiency and safety• Industrialisation of emerging economies

Sales by market* pro-forma post IDI


• Global relationships with blue chip customer base across variety of end markets

• Relatively low customer concentration

• Addressing multiple tiers of supply chain- Government- Prime contractors- OEMs- Sub-systems manufacturers- Contract electronic manufacturers- Distribution

Customers Connectors

http://www.google.com/imgres?imgurl=http://www.gnec.ac.in/vlsi/images/texas_instruments_logo.png&imgrefurl=http://www.gnec.ac.in/vlsi/Committees.html&usg=__7OPT-BKMCft_LqPfAgsG76-jPOM=&h=275&w=744&sz=30&hl=en&start=2&um=1&itbs=1&tbnid=OSM0uFtwfc0qJM:&tbnh=52&tbnw=141&prev=/images?q=texas+instruments+logo&um=1&hl=en&safe=active&tbs=isch:1

http://www.google.com/imgres?imgurl=http://www.alda-freeport.org/images/Cochlear%20logo.jpg&imgrefurl=http://www.alda-freeport.org/exhibits.htm&usg=__sXn7Ulvcnu53r2DyuNGHnkuZi0o=&h=1330&w=1416&sz=118&hl=en&start=2&um=1&itbs=1&tbnid=u-MbUBaQkuclxM:&tbnh=141&tbnw=150&prev=/images?q=cochlear+logo&um=1&hl=en&safe=active&tbs=isch:1


Competitive position Connectors

• Specialist divisions within major connector conglomerates

• Smaller privately held connector companies with: - specialist technological offering, or- particular market focus

• Few global players- most focused on specific geographies

• Differentiators- technology- delivery- engineering support - breadth of product offering

http://www.deutsch.net/

http://www.fischerconnectors.it/home.htm

http://www.ectinfo.com/

http://www.yokowoconnector.com/index.html

http://www.google.com/imgres?imgurl=http://www.caspa.com/files/winway.png&imgrefurl=http://www.caspa.com/about/silicon&usg=__jCHAd2O1DjGtQQ0aLjZhQgddrIY=&h=49&w=175&sz=11&hl=en&start=28&um=1&itbs=1&tbnid=e-xHGETEQYw4vM:&tbnh=28&tbnw=100&prev=/images?q=winway+technology&start=21&um=1&hl=en&safe=active&sa=N&ndsp=21&tbs=isch:1

http://www.google.com/imgres?imgurl=http://www.ebyelectro.com/images/precidip/precidip-logo-01.jpg&imgrefurl=http://www.ebyelectro.com/preci-dip-0toc.asp&usg=__mgsdCwuJuwu83zs0FgtYTJLtXeU=&h=163&w=154&sz=8&hl=en&start=6&um=1&itbs=1&tbnid=KTiizT6aM7yH0M:&tbnh=98&tbnw=93&prev=/images?q=preci-dip&um=1&hl=en&safe=active&tbs=isch:1

http://www.johnsoncompany.com/images/millmax.gif

http://www.avioniccomponents.com/images/cinch_logo.jpg

http://www.google.com/imgres?imgurl=http://www.thecabledirectory.com/upload_images/cooper_logo_2.jpg&imgrefurl=http://www.thecabledirectory.com/news_item.php?newsID=28862&usg=__bkLykRuoXEmHz73lQ39XEfOODek=&h=153&w=232&sz=5&hl=en&start=21&um=1&itbs=1&tbnid=hJlWzk6_bPHxGM:&tbnh=72&tbnw=109&prev=/images?q=cooper+industries+logo&um=1&hl=en&safe=active&gbv=2&tbs=isch:1


Case Study 1: Innovation (Future soldier connectivity)

Connectors

• Changing conflict scenario demanding battlespace awareness and connectivity at the soldier level

• Demanding environment: size, weight, robustness

• Global market but highly fragmented

• Thoroughly researched market size and consolidated divergent specifications

• Applied military design expertise to create platform product solutions

• Leveraged global S&M resources and customer relationships

• Bidding on 29 projects across 11 countries• Already selected for projects in USA, UK, France, Italy and India• Multi million pound opportunity over next 5 years• Potential to sell product range into other end markets


Case Study 2: Market adjacency (Package-on-Package testing)

Connectors

• Package-on-package: the preferred method of integrating logic and memory devices

• High growth potential- smart phones key driver- forecast CAGR ~25% for next 5 years

• Utilised strong relationships with PoP suppliers to gain a detailed understanding of requirements

• Innovative design allows for simple, reliable and repeatable testing of both sides of the semiconductor device

• Application knowledge and technical capabilities led to high reliability solution that compensates for the tolerances in the devices and test mechanism

• Opportunity to gain significant share of multi million pound market that was previously unaddressed

http://www.google.com/imgres?imgurl=http://www.sikod.com/photo/albums/packaging/formfactor/probecard.jpg&imgrefurl=http://www.sikod.com/blog/tag/amkor/&usg=__LFDtgg2NBWkNOMNda0nONHEj2Lc=&h=317&w=400&sz=18&hl=en&start=86&um=1&itbs=1&tbnid=3MfEGG90kIvmIM:&tbnh=98&tbnw=124&prev=/images?q=semiconductor+package+on+package+testing&start=80&um=1&hl=en&safe=active&sa=N&ndsp=20&tbs=isch:1


Case Study 3: Value creating acquisition (IDI)

Connectors

• Complementary technology• Compatible value proposition• Market / application diversification• Potential for significant value creation through

sales and operational synergies

• Carried out thorough due diligence • Identified synergies:

- Expansion of SE Asian Sales presence- NA Operations- European Sales

• Acquisition completed in April: integration on plan, will complete by end July 2010• Sales synergies activities underway with some early success in Europe• Building on previously fragmented sales in China and SE Asia• Leveraging manufacturing operations: increased utilisation of Mexico and China facilities


Summary Connectors

• Broad and deep capability in high reliability connector technologies

• Addressing diverse end markets

• Strong global presence with customer focused sales model

• Good growth opportunities- new products and programmes- geographic expansion

• Strong margins derived through technical product differentiation


Microwave Defence Kent Whitney


Applying discriminating technology to provide microwave and millimetre wave system, sub-system and component solutions

Microwave DefenceOverview

http://en.wikipedia.org/wiki/File:Wideband_Global_SATCOM_Satellite.jpg

http://www.google.com/imgres?imgurl=http://uavforum.org/gallery/Shadow/AAI_Shadow_200_photoA.jpg&imgrefurl=http://uavforum.org/stills.asp&usg=__U2tB1vlZ9-wliq6hOFMOvnVGTjg=&h=1200&w=1800&sz=282&hl=en&start=131&itbs=1&tbnid=NT78WLUt9A2JRM:&tbnh=100&tbnw=150&prev=/images%3Fq%3Duav%2Bshadow%26start%3D120%26hl%3Den%26safe%3Dactive%26sa%3DN%26gbv%3D2%26ndsp%3D20%26tbs%3Disch:1


Antenna systems - Military• Broad capability addressing multiple market segments including

- SATCOM, radars, telemetry systems for UAVs and smart weapons• Discriminating antenna technology and full integrated system capability

Antenna systems – Commercial Aerospace• Range of airborne communications antenna systems• Newly developed broadband system providing high bandwidth connectivity• Market leading technical performance: accuracy, sensitivity and data

transmission rates

Transceivers• Transmit and receiver modules also used in multiple market segments

including space applications• Difficulty of performance specifications and system level qualification

provide high barriers for potential new entrants

Products and capabilities Microwave Defence


Frequency sources• Core technology at the heart of all microwave systems

- creating the “waves”• Very high quality sources (cleaner or lower noise) demanded for the

highest performance applications

Timing systems• Extremely accurate internal clock systems• Critical in high data rate and on-the-move applications• High barriers to entry due to precision, ruggedness and anti-jamming

requirements

Components• Broad range of microwave and millimetre wave components including

- filters, isolators, circulators, waveguides• Leveraged to access new opportunities and maximise content

Products and capabilities Microwave Defence


Locations, markets and growth drivers

Growth Drivers

• Irregular conflict scenarios driving need for improved situational awareness and force protection

• More data: more bandwidth: higher frequencies• Connectivity: network centric and on-the-move• Collateral damage limitation: smart weapons• Primes focusing on integrating: outsourcing more

Microwave Defence

Defence

AmericasRoW

Sales by market

EU

Sales by geography

Other

AerospaceSpace

Telecoms


• Addressing government agencies, primes and OEMs

• Currently focused on US and EU

• Strong relationships with major primes

• Diverse product line and customers provides stable revenue base

• Positioned on long term high dollar programmes to drive future growth

• Derivative products and other programmes provide additional opportunities

Customers Microwave Defence

http://www.itt.com/

http://missiledefense.files.wordpress.com/2010/02/lockheedmartinlogo.jpg

http://www.google.com/imgres?imgurl=http://www.cewit.org/conference2009/logos/NorthropGrumman.JPG&imgrefurl=http://www.cewit.org/conference2009/sponlist.asp&usg=__VOoOR3byflGk6yEu4HMIK1fG33g=&h=619&w=2481&sz=75&hl=en&start=31&um=1&itbs=1&tbnid=v3gpNz_0DwqnsM:&tbnh=37&tbnw=150&prev=/images%3Fq%3Dnorthrup%2Bgrumman%26start%3D21%26um%3D1%26hl%3Den%26safe%3Dactive%26sa%3DN%26ndsp%3D21%26tbs%3Disch:1

http://www.google.com/imgres?imgurl=http://www3.euitt.upm.es/postgrado/satelite/images/Logos/ThalesAleniaSpace-160.jpg&imgrefurl=http://www.euitt.upm.es/postgrado/satelite/&usg=__XNIq5jvB6lNA374C9-Q60rRfEi4=&h=78&w=160&sz=35&hl=en&start=15&um=1&itbs=1&tbnid=a8S8GPWASPFrrM:&tbnh=48&tbnw=98&prev=/images%3Fq%3DThales%2BAlenia%2BSpace%26um%3D1%26hl%3Den%26safe%3Dactive%26tbs%3Disch:1

http://www.google.com/imgres?imgurl=http://www.helihub.com/wordpress/wp-content/uploads/aai-150x150.jpg&imgrefurl=http://www.helihub.com/tag/boeing/&usg=__OKjYMhJLrm4IjJvQFPQvEev7rKo=&h=150&w=150&sz=8&hl=en&start=24&um=1&itbs=1&tbnid=yGaGg22qA6Ih7M:&tbnh=96&tbnw=96&prev=/images%3Fq%3DTextron%2BAAI%26start%3D21%26um%3D1%26hl%3Den%26safe%3Dactive%26sa%3DN%26ndsp%3D21%26tbs%3Disch:1

http://www.google.com/imgres?imgurl=http://www.socaltech.com/images/logos/row44.jpg&imgrefurl=http://www.socaltech.com/row_44_gets__7_7_m_more/s-0028527.html&usg=__16q5cbQIDL0mpvRo8S3l-B2Nse8=&h=81&w=200&sz=3&hl=en&start=48&um=1&itbs=1&tbnid=CnyHxMGa7f6g3M:&tbnh=42&tbnw=104&prev=/images%3Fq%3DRoW44%26start%3D42%26um%3D1%26hl%3Den%26safe%3Dactive%26sa%3DN%26ndsp%3D21%26tbs%3Disch:1


• Some consolidation but remains highly fragmented market with many small to medium sized businesses

• Internal capabilities within customers

• Most competitors have narrow technology focus

• US centric

• Key differentiators- heritage- technology expertise- quality - customer support

Competitive position Microwave Defence

http://www.anaren.com/

http://www.google.com/imgres?imgurl=http://www.helihub.com/wordpress/wp-content/uploads/ems-technologies-150x150.jpg&imgrefurl=http://www.helihub.com/2010/01/26/ems-technologies-forms-new-aviation-business-unit/&usg=__sGcpy0mVAvkJzhXrwNEV59vasEg=&h=150&w=150&sz=3&hl=en&start=10&itbs=1&tbnid=ZaaxEcIYW0NM7M:&tbnh=96&tbnw=96&prev=/images%3Fq%3DEMS%2Btechnologies%26hl%3Den%26safe%3Dactive%26gbv%3D2%26tbs%3Disch:1

http://www.google.com/imgres?imgurl=http://www.mouser.com/images/suppliers/spectrumcontrol.gif&imgrefurl=http://www.mouser.com/spectrumcontrol/&usg=__A5vIxhjOpyj5IYbDF3wgSL00g7o=&h=83&w=199&sz=5&hl=en&start=142&itbs=1&tbnid=u1ALX9znsffcHM:&tbnh=43&tbnw=104&prev=/images%3Fq%3DSpectrum%2BControls%26start%3D126%26hl%3Den%26safe%3Dactive%26sa%3DN%26gbv%3D2%26ndsp%3D21%26tbs%3Disch:1

http://www.craneae.com/Default.aspx

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http://www.akoninc.com/index.php

http://www.spectracomcorp.com/Default.aspx

http://www.google.com/imgres?imgurl=http://www.stepelectronics.com.tw/K%26L/K%26L%2520logo_s.PNG&imgrefurl=http://www.stepelectronics.com.tw/K%26L/K%26L.htm&usg=__Aav_L4CuJywEHMIenrMG-pEtXy8=&h=157&w=339&sz=37&hl=en&start=26&um=1&itbs=1&tbnid=xtmEq10PSvpUhM:&tbnh=55&tbnw=119&prev=/images%3Fq%3DK%2526L%2Bmicrowave%26start%3D21%26um%3D1%26hl%3Den%26safe%3Dactive%26sa%3DN%26ndsp%3D21%26tbs%3Disch:1

http://www.google.com/imgres?imgurl=http://www.faqs.org/sec-filings/100202/MICRONETICS-INC_8-K/g7781677816_ex991.jpg&imgrefurl=http://www.faqs.org/sec-filings/100202/MICRONETICS-INC_8-K/dex991.htm&usg=__GWCV10L7wc5GylyJTPpgK0PGRFE=&h=75&w=211&sz=6&hl=en&start=39&um=1&itbs=1&tbnid=jNufiSbsxE3w8M:&tbnh=38&tbnw=106&prev=/images%3Fq%3Dmicronetics%26start%3D21%26um%3D1%26hl%3Den%26safe%3Dactive%26sa%3DN%26ndsp%3D21%26tbs%3Disch:1

http://www.google.com/imgres?imgurl=http://www.irishjobs.ie/Logos/Microsemi-3937.gif&imgrefurl=http://www.irishjobs.ie/Recruiters/Microsemi-3937.aspx&usg=__3szR3aeAbkMMPtRyTK-uIn2Lw2I=&h=89&w=300&sz=4&hl=en&start=59&um=1&itbs=1&tbnid=RxzuZfOMo4r4fM:&tbnh=34&tbnw=116&prev=/images%3Fq%3Dmicrosemi%26start%3D42%26um%3D1%26hl%3Den%26safe%3Dactive%26sa%3DN%26ndsp%3D21%26tbs%3Disch:1

http://www.google.com/imgres?imgurl=http://www.mpassociates.com/ebooth/images/125012CPI%2520logo%2520may%252009.jpg&imgrefurl=http://www.mpassociates.com/ebooth/exhibitor.aspx%3FconfID%3D12%26mpid%3D1250&usg=__vWK3Kn1nRNbFJ1yTkqkJLx-xhh0=&h=100&w=205&sz=36&hl=en&start=34&um=1&itbs=1&tbnid=72fj_Ls7Coy8LM:&tbnh=51&tbnw=105&prev=/images%3Fq%3DCPI%2Binternational%2Binc%26start%3D21%26um%3D1%26hl%3Den%26safe%3Dactive%26sa%3DN%26ndsp%3D21%26tbs%3Disch:1

http://www.google.com/imgres?imgurl=http://www.iwpc.org/images/logos/endwave_logo.jpg&imgrefurl=http://www.iwpc.org/members.asp&usg=__XDa48G-wJMQVyqq7mEnHb49luIE=&h=258&w=841&sz=17&hl=en&start=3&um=1&itbs=1&tbnid=5WJ9Ri_zJHeSoM:&tbnh=44&tbnw=145&prev=/images%3Fq%3Dendwave%26um%3D1%26hl%3Den%26safe%3Dactive%26tbs%3Disch:1


Case Study 1: Innovation (Broadband on-the-move)

• Market demand for connectivity on-the-move for high data rate applications - live TV, internet, videoconferencing, sensor data

• Multiple markets: commercial and military• Performance requirement (speed): just like at office or home

• Market surveyed and opportunities targeted• Developed building blocks with internal funds• Further internal investment to complete commercial

system development• Customer funded development for specific military

applications

• First to market with high volume commercial airborne product• Partnered with Row44 system supplier

- selected by Southwest Airlines - under consideration by at least three other airlines

• Developed into other commercial and military variants

Microwave Defence

FY10 FY11

Forecast revenue


Case Study 2: Entrepreneurial culture (Force protection)

• Change in threat required previously deployed IED jamming systems to be upgraded (20,000 systems)

• Incumbent design had only component level Smiths Interconnect content

• Opportunity to provide higher level integrated microwave assembly (IMA)

• Approached customer with alternative IMA design providing improved performance at lower cost

• Internal R&D investment• Extremely rapid design and development: skunk works approach

• Customer selected Smiths Interconnect as one of two suppliers• Contract received for 50% of initial upgrade quantities• Production over the next 2-3 years with total potential revenue in excess of £25m

Microwave Defence


Case Study 3: Customer relationships (Naval SATCOM)

• Legacy position on 1st and 2nd generation naval SATCOM systems with major customer due to unique capabilities at higher frequencies (millimetre wave)

• Created value to customer and added content by building and integrating entire system

• New requirement for 3rd generation system due to high data demands and new satellite constellations

• Teamed with customer for 3rd generation system• Past performance key in selection process• Customer won bid and initial system qualified

• Potential to become one of the largest programmes for Smiths Interconnect• Production over 6 years• Opportunities to increase programme content

- adding content for Smiths Interconnect and value for customer

Microwave Defence


Summary

• Discriminating technologies leveraged to capture business and add content

• Design and manufacture partner to blue chip customer base

• Focused on growth segments of defence spending- C4ISR- On-the-move connectivity- Force protection

• Leveraging technology into adjacent markets

Microwave Defence


Investor Day Agenda

08:30 Presentations





10:45 Q&A


13:00 Buffet Lunch



Microwave Telecoms Jacqui McLaughlin


Global provider of specialised system critical products and solutions that enable optimal performance of wireless networks

Microwave TelecomsOverview


Radio link antennas• The air interface to allow cell towers to communicate

to each other• Industry best lead-times and technology supporting

ultra high capacity networks

Network optimisation solutions• Maximising signal coverage, blocking network

interferers, combining multiple frequencies and networks• Expertise in application knowledge is critical

differentiator

Network test instruments• Validating the integrity of the radio frequency path• Achieves unprecedented improvements in performance

of existing networks by assessing and solving interference causing system anomalies

Products and capabilities Microwave Telecoms


Filter components• Products that filter the frequency spectrum – blocking unwanted frequencies

and noise – for both base station radio unit and backhaul units• Providing custom engineered products and emerging market capabilities

Signal processing components• A range of core components used in microwave electronic systems to

translate digital signals to radio frequency signals• Market leading brands and heritage plus design and manufacturing

processes know-how provide significant barriers to entry

Product test instruments• Specialised equipment used to verify product performance• Industry leading expertise

- Summitek brand recognised globally

Products and capabilities Microwave Telecoms



Growth Drivers

• Proliferation of high data rate mobile applications• Aging and congested networks

- efficiency, capacity, health & environmental issues• The digital dividend • Frequency spectrum re-farming• Emerging markets: geographic and new applications

Microwave Telecoms

Wireless Telecoms

Americas

RoW

Sales by market

ChinaEU

Sales by geography

Other

India


• Network operators- Partnership relationships with several large blue chips- Essentially regional strategies- Few global players; many looking to

invest in developing economies• Network equipment manufacturers

- Small number of major players- Globally organised- Evolving business model from

equipment suppliers to managing networks

• Network installers- Small and very regional

• Specialised equipment suppliers- Point to point radio (backhaul) suppliers

Customers Microwave Telecoms

http://www.att.com/gen/landing-pages?pid=3308

http://www.nokiasiemensnetworks.com/global/?languagecode=en

http://www.harrisstratex.com/

http://www22.verizon.com/

http://wwwen.zte.com.cn/en/

http://www.optus.com.au/

http://www.google.com/imgres?imgurl=http://www2.wf.net/admin/assets/Clearwire_logo.jpg&imgrefurl=http://www2.wf.net/admin/assets/&usg=__C5rrn3goTuiHpXYpdP7UM2Lz-NU=&h=254&w=901&sz=47&hl=en&start=1&itbs=1&tbnid=Q0J6D5Rp4rlOnM:&tbnh=41&tbnw=146&prev=/images%3Fq%3DCLEARWIRE%26hl%3Den%26safe%3Dactive%26sa%3DG%26gbv%3D2%26tbs%3Disch:1

http://www.google.com/imgres?imgurl=http://www.goingwimax.com/wp-content/uploads/2009/10/dragonwave-logo1.gif&imgrefurl=http://www.goingwimax.com/dragonwave-5249/&usg=__H2bCnbQQsh3fkw-xwRtLbx2X8BM=&h=239&w=479&sz=21&hl=en&start=6&itbs=1&tbnid=IX6hhmEXq2lLhM:&tbnh=64&tbnw=129&prev=/images%3Fq%3Ddragonwave%26hl%3Den%26safe%3Dactive%26gbv%3D2%26tbs%3Disch:1

http://www.google.com/imgres?imgurl=http://www.iwpc.org/images/logos/isco_logo.jpg&imgrefurl=http://www.iwpc.org/members.asp&usg=__qvbl0o2me5S9Y6OArq8QeTx9tFw=&h=134&w=250&sz=11&hl=en&start=3&itbs=1&tbnid=dBDiMWrcRka7uM:&tbnh=59&tbnw=111&prev=/images%3Fq%3Disco%2Blogo%26hl%3Den%26safe%3Dactive%26gbv%3D2%26tbs%3Disch:1


• Two consolidators focused on gaining market share – breaching the line between network operators and equipment manufacturers

• Emerging players from Asia focused on domestic markets but seeking access to global opportunities

• Multiple small suppliers with varying complexities of offerings and focused on specific geographies

• Test instrumentation companies tend to be specialists with limited exposure to system applications

Competitive position Microwave Telecoms

http://www.anaren.com/

http://metrofield.com/rosenberger.gif


http://www.google.com/imgres?imgurl=http://platinumcommunicationservices.com/images/commscope_logo_colour.jpg&imgrefurl=http://platinumcommunicationservices.com/Services.html&usg=__LPMKfb89nofiqlD0grPTh1wculA=&h=555&w=1772&sz=150&hl=en&start=20&itbs=1&tbnid=qDK6t4bIAWWUKM:&tbnh=47&tbnw=150&prev=/images%3Fq%3Dcommscope%26hl%3Den%26safe%3Dactive%26sa%3DN%26gbv%3D2%26ndsp%3D21%26tbs%3Disch:1

http://www.google.com/url?source=imgres&ct=tbn&q=http://www.dba-llc.com/picts/powerwave_logo_small.jpg&sa=X&ei=dLIOTLHVM8T7lwfrrOFs&ved=0CAUQ8wc4Aw&usg=AFQjCNE3AwR1ejeVNzZ-p8q4tV4V8AI8WQ

http://www.google.com/imgres?imgurl=http://www.ercom.fr/pictures/images/081113044709AEROFLEX.JPG&imgrefurl=http://www.ercom.fr/partenaires/home/%3Flg%3Den&usg=__97VOWQyRF1cGURWstXqKPV9_WFI=&h=800&w=800&sz=33&hl=en&start=71&itbs=1&tbnid=yzGeu-sP-P1HeM:&tbnh=143&tbnw=143&prev=/images%3Fq%3Daeroflex%26start%3D63%26hl%3Den%26safe%3Dactive%26sa%3DN%26gbv%3D2%26ndsp%3D21%26tbs%3Disch:1

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http://www.electryon.se/img/communication/components/kmw_logo.jpg

http://www.comba-telecom.com/Default.aspx

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http://www.google.com/imgres?imgurl=http://www.acetechexperts.com/logo.jpg&imgrefurl=http://acetechexperts.com/&usg=__TpvYALYqid5WWaXH6Jjb5he2yXE=&h=310&w=455&sz=22&hl=en&start=7&um=1&itbs=1&tbnid=vf6NzPEFr3FvRM:&tbnh=87&tbnw=128&prev=/images%3Fq%3Dace%2Btechnologies%26um%3D1%26hl%3Den%26safe%3Dactive%26tbs%3Disch:1

http://www.cciproducts.com/


Case Study 1: Pioneering application (Portable PIM)

• Telecom networks are sensitive to interference caused by anomalies in the physical structure

• Smiths Interconnect test equipment used extensively to identify rogue product performance in the factory, however high quality components do not guarantee a high performance system

- the physical interconnect is critical

• Identified a pioneering company, with limited market access, which had created a field solution to validate the integrity of the radio frequency path

• Created a teaming relationship to develop the concept to a product and methodology that could be used by operators to guarantee network quality

• Progressed to wholly owned acquisition• Leveraging existing market brand (Summitek) to fast

track industry adoption• Leveraging Smiths global resources to access USA,

Europe, India and China markets

Microwave Telecoms

• Over £15m of revenue achieved in two years• Scratching surface of potential market • Continued investment in product

enhancements to maintain competitive advantages


Case Study 2: Leveraging resources (Globalisation)

• Acquired a small Australian operation with market leading technology

• Strong relationships with Australian network operators but limited international access

• Australia represents only 0.3% of the global subscriber base

• Leveraged Smiths’ global resources and established relationships with leading US network operators representing 4% of world subscriber base

• Developed applicable offerings for the market by applying technologies to new US frequency band allocations (4G LTE)

• Used leading edge technology to stay differentiated in fierce competition

• Undertaking higher volume manufacturing in larger scale and lower cost Smiths’ facilities in China

Microwave Telecoms

• Australian market consistently generates ~ £10m pa• Potential value of first major US 4G LTE contract is

~ £60m over 3 years• Approximately 100 network operators now

committed to 4G LTE investments


Case Study 3: Applying know how to niches (GSM-R)

• Congested frequency spectrum with competing demands from telecoms, military, broadcast and commercial applications

• Commercial wireless networks conflicting with safety critical rail control signals

• Applied technical and applications expertise to assess key issues and system requirements for rail communications

• Leveraged Smiths Interconnect customer relationships to gain access to industry experts, customers and specification writers

Microwave Telecoms

• Nine countries in Europe have reported severe issues including high speed trains being forced to stop• The roll-out of spectrum hungry high data rate applications will only aggravate the potential problem for

the 100,000 trains operating in the region• Our products will be used by the ETSI (European Telecommunications Standards Institute) investigative

committee to trial a solution

Frequency (MHz)

s21

(dB)

-90

-80

-70

-60

-50

-40

-30

-20

-10

0

10

s11 (dB)

-45

-40

-35

-30

-25

-20

-15

-10

-5

0

5

Frequency (MHz)860 868 876 884 892 900 908 916 924 932 940

GSM R Dual Diplexer, 0.6 MHz Guardband / Mixed Attenuation

s11 s21

1v

8v

7bv

7av

6bv

6av

5v

4v

3bv

3av

2bv

2av


Summary

• Strong engineering capabilities providing market leading solutions

• Global resources addressing global market

• Strong fundamental growth drivers- demand for high speed and high

capacity networks- frequency spectrum congestion

• Margins above industry average

- opportunity to improve further

Microwave Telecoms


Protection Shawn Thompson


A complete systems approach providing power and signal integrity solutions for communications and critical electronic systems

ProtectionOverview


Radio frequency protection• Radio frequency cable protection for tower electronics• Innovative patented technology• Industry leading engineering expertise

AC | DC and data signal protection• Power and signal surge protection for electronics and communications• Custom engineered solutions• Broad patented product offering • Regulatory standards (UL, IEC, CE, RoHS, IEEE) are barriers to market

Integrated power and signal cabinets• Indoor/outdoor wireless communication main power interface• Integrated power source, surge protection and generator connection• Custom designs, market leading responsiveness

Products and capabilities Protection


DC power distribution• Patented DC power distribution solution for high power requirements• Smallest industry footprint designed to support space restrictions• Specified by Alcatel Lucent, Ciena, AT&T and Cisco

EMP | TVSS filters• Electromagnetic pulse power and signal protection• Combined protection expertise with electromagnetic filtering technology• Increasing military demand for secure facilities and networks

Power conditioning• Regulate stable reliable power to critical patient diagnostic equipment• Exceptional service and on-time delivery are key differentiators in medical

market• Safety and regulatory standards (FDA, UL and CE approval) provide

barriers to entry

Products and capabilities Protection



Growth Drivers

• Proliferation of electronics• Cost of damage to / downtime of critical equipment• Aging and unreliable power grids• Increasing power quality demands • Safety and regulatory pressures• Susceptibility to high energy weapons

Americas

RoW

ChinaEU

Sales by geography

India

Sales by market

Wireless Telecoms

DefenceMedical

Industrial

RailOther

Protection


• Global partnerships with blue chips

• Addressing multiple levels of supply chain in variety of end markets- Network operators- Integrators- Government- Prime contractors - OEMs- Distribution

• Direct and indirect routes to market- Channels based on customer

preferences and market drivers

Customers Protection

http://www.att.com/gen/landing-pages?pid=3308

http://www.varian.com/us/

http://www.nokiasiemensnetworks.com/global/?languagecode=en

http://www.harrisstratex.com/

http://www.cisco.com/en/US/hmpgs/index.html

http://www22.verizon.com/

http://wwwen.zte.com.cn/en/

http://www.northropgrumman.com/index.html


• Mixture of small private businesses and divisions of major corporations

• Limited concentration / no dominant players

• Multiple regional markets (not one global) due to differing international standards and regulatory environment

• Differentiators- technology- delivery- engineering support - breadth of product offering

Competitive position Protection

http://www.tnb.com/ps/pubint/index.cgi

http://www.hubersuhner.com/hs-index.htm

http://www.commscope.com/company/eng/index.html


http://www.google.com/imgres?imgurl=http://www.ilukauto.com/images/logos/dehn.jpg&imgrefurl=http://www.ilukauto.com/products_foriegn.html&usg=__BD8Ugz0PHCn_45y1TkmnrwNPeMs=&h=74&w=109&sz=4&hl=en&start=29&itbs=1&tbnid=KW541AqMY245WM:&tbnh=58&tbnw=85&prev=/images%3Fq%3Ddehn%2B%2526%2Bsohne%26start%3D21%26hl%3Den%26safe%3Dactive%26sa%3DN%26gbv%3D2%26ndsp%3D21%26tbs%3Disch:1

http://www.google.com/imgres?imgurl=http://www.slindustries.com/sliwebsite/sliwebsite4.nsf/images/slhead_01.gif/%24File/slhead_01.gif&imgrefurl=http://www.slindustries.com/sliwebsite/sliwebsite4.nsf/Pages/companies_other.html&usg=__FupvygiYGpDbDIuwUZywUMF_1ho=&h=68&w=132&sz=4&hl=en&start=79&itbs=1&tbnid=70JqK7Rr1t_m3M:&tbnh=47&tbnw=92&prev=/images%3Fq%3Dsl%2Bindustries%26start%3D63%26hl%3Den%26safe%3Dactive%26sa%3DN%26gbv%3D2%26ndsp%3D21%26tbs%3Disch:1

http://www.google.com/imgres?imgurl=http://www.seeklogo.com/images/P/Phoenix_Contact-logo-CC385D71E0-seeklogo.com.gif&imgrefurl=http://www.seeklogo.com/tag.html%3Fq%3DContacts&usg=__1GtPm-2dbpgVRygJMDWlUuiNLag=&h=200&w=200&sz=3&hl=en&start=42&itbs=1&tbnid=-YB31l08uG1qBM:&tbnh=104&tbnw=104&prev=/images%3Fq%3Dphoenix%2Bcontact%26start%3D21%26hl%3Den%26safe%3Dactive%26sa%3DN%26gbv%3D2%26ndsp%3D21%26tbs%3Disch:1

http://www.google.com/imgres?imgurl=https://www.frost.com/prod/servlet/cio/10342620&imgrefurl=http://www.frost.com/prod/servlet/press-release.pag%3Fmode%3Dopen%26docid%3D10342608&usg=__nYUFn0Se775uOmZ7A2rjcIHbm1o=&h=205&w=380&sz=11&hl=en&start=18&itbs=1&tbnid=drJu8OKSHbfmZM:&tbnh=66&tbnw=123&prev=/images%3Fq%3Demerson%2Bnetwork%2Bpower%26hl%3Den%26safe%3Dactive%26gbv%3D2%26tbs%3Disch:1

http://www.google.com/imgres?imgurl=https://www.electronic-parts.com/store/graphics/02Logo_Corcom.gif&imgrefurl=https://www.electronic-parts.com/store/catalog.cfm%3Fsearchstring%3DRA30%26dest%3Dindex%26eflag%3Dshowresults%26andor%3Dpartial&usg=__PGlg0CslIAVWHs8wrxstfJ6YCpo=&h=54&w=112&sz=5&hl=en&start=10&itbs=1&tbnid=V8gM7aRM_-cBjM:&tbnh=41&tbnw=86&prev=/images%3Fq%3DCorcom%2Blogo%26hl%3Den%26safe%3Dactive%26gbv%3D2%26tbs%3Disch:1

http://www.google.com/imgres?imgurl=http://www.globalspec.com/CitelAmerica/logo.jpg&imgrefurl=http://www.globalspec.com/datasheets/176/CitelAmerica&usg=__W3wWYzuUkGspwMj21XBJERPixB0=&h=158&w=294&sz=19&hl=en&start=102&itbs=1&tbnid=bxx7cCYmrCefbM:&tbnh=62&tbnw=115&prev=/images%3Fq%3Dcitel%26start%3D84%26hl%3Den%26safe%3Dactive%26sa%3DN%26gbv%3D2%26ndsp%3D21%26tbs%3Disch:1


Case Study 1: Market diversification (Military EMP)

• Historically narrow market focus (telecoms)• Opportunity identified to develop military

market after customer request catalyst• Research confirmed positive growth drivers

supporting strong business case

• Recognised investment timescales• Developed necessary R&D, S&M, service,

operations and security capabilities• Leveraged other Smiths Interconnect

resources and relationships to accelerate market and customer access

• Partner of choice for key primes on multiple projects• Leveraging position with military agencies• Fastest growing segment of business

Protection

0

4

8

12

16

2007 2010

Military market as % of total business

http://upload.wikimedia.org/wikipedia/commons/e/ef/USS_Zumwalt_%28DDG-1000%29.jpg


Case Study 2: Operational leverage

• Opportunity identified to strengthen margin, expand market share and broaden product offering through consolidation of two companies (PolyPhaser and Transtector) with similar products, customers and markets

• Capitalise on established Smiths Interconnect global manufacturing footprint (China, India, Mexico and USA)

• Leveraging resources through aligned infrastructure

• Detailed planning and execution led to successful project • Approximately £2m ongoing annual savings• Increased market share due to combined brand identity• Customer loyalty maintained and increased

Protection


Summary

• Innovative technology and diverse product offering

• Growth sector driven by increasing power demands across multiple end markets

• Customer centric and solution driven business model

• Strong margins sustained through product differentiation and operational leverage

Protection


Mike Hansen VP Finance, Smiths Interconnect


Positioned for growth

• Strong fundamental growth drivers for specialist electronic products

• Positions on several significant programmes now entering production

• Significant barriers to new entrants

• R&D investment - targeted at growth segments - higher than industry average

• Globalisation in early phases

• Diversity of end markets - opportunity to leverage existing

resources to provide access for broader technology offering

- mitigating any concentration risk

• Flexibility to align resources with higher growth markets

Sales growth since 2005 (£m)

Consistently achieved target growth rates

pre-economic downturn

Well positioned to return to target growth rates


New business• Value-based process to direct R&D investment to projects generating

the highest risk adjusted value• Leveraging routes to market, customer relationships and program

positions - sales channel optimizations (distributors and 3rd party representatives) - utilising common CRM (customer relationship management) tool - maximising Interconnect content per opportunity

Value creation: optimising resources

Effective utilisation of resources and assets to maximise value creation

Operations• Sharing facilities: multi-technology sites in Mexico, China and India• Sharing operational best practices• Leveraging sourcing opportunities• Optimising functional organisations


Margin improvement opportunities

Target margin range: 21% to 23%

Opportunities• New products and

programmes• Leveraging LCMs• Sourcing and other

operational initiatives• Corporate initiatives

Opportunities• Volume recovery• Non-repetition of restructuring

and acquisition related costs• Fixed cost controls and back

office initiatives• Accretive impact of IDI including

synergy opportunities

Ong

oing

One

-off

Current margin: 17% to 18%

Pressures• Competition• Dilutive impact of price points in emerging geographies• Input costs: material and labor inflation• Retention of key talent: particularly technical• Government regulations

Ongoing


Business characteristics

• High mix / low to medium volume• Predominantly build to order• Vendor managed inventory projects• Blue chip customers

Stable balance sheet and strong cash flow

Balance sheet

• Low capital investment• Good working capital management• Low bad debt exposure

Strong stable cash flow: conversion consistently > 90% of profits


Strong cash management and excellent margins

Working Capital (% of sales) Capex (% of sales) Operating margin (% of sales)

Comparative metrics

Connectors

Microwave Defence

Microwave Telecoms

Protection


Current Core Expanded Core

~£6bn

~£12bn

Protection

Microwave

Connectors

Building the business through targeted acquisitions

Track record: creating value• Excellent record of selecting targets, acquiring, integrating and creating value• Significantly exceeding expectations and return on investment criteria

IDI• Large acquisition of complementary

technologies and manufacturing operations• Integration running smoothly and to plan• Performing ahead of expectations• Immediately EPS accretive

Channel• Small bolt on acquisition building market

leading presence in ferrite components• Integration completed• Performing ahead of expectations• Immediately EPS accretive

Opportunity: target rich environment• Market remains fragmented; limited consolidation to date• Adjacency opportunities for all technology segments• Seeking to:

- add complementary products and technologies - access new markets, programmes and customers - extend geographical presence and exposure to fast

growing markets - leverage existing scale


Ralph Phillips President, Smiths Interconnect


Organic growth

• New programmes and products• Targeted R&D investment in

growth sectors• Market expansion• Margin improvements

Acquisitive opportunities

• Excellent track record• Sizeable and growing specialist market• Target rich environment• Opportunities to expand into adjacencies

Smiths Interconnect: the leading provider of specialist electronic products

Creating shareholder value

Summary: value creation opportunities

Strong track record Positioned for future value creation

Fundamental business strengths driving growth strategiesEntrepreneurial culture Innovation Optimised resources and scale


Smiths Interconnect - an attractive investment case

Market leader within specialty electronic and radio frequency products market

Technologically differentiated products addressing high barriers to entry segments

Diverse end markets with strong underlying growth characteristics

Entrepreneurial culture plus controls and resources of FTSE100 plc

Margins leveraged to volume growth

Strong track record of creating value, organically and acquisitively

Unconsolidated market providing opportunity for further acquisitions

Smiths Interconnect targets: Sales growth: 6-10%* Margins: 21-23%*Range of underlying organic growth at constant currency over 3 year period


Investor Day Agenda

08:30 Presentations





10:45 Q&A


13:00 Buffet Lunch



Investor Day Agenda

08:30 Presentations





10:45 Q&A


13:00 Buffet Lunch



Groups for the site tour

4

5

Ralph Phillips

Mike Hansen

Shaun Caraccio

Jay Angelo

Camille Cox

Note: Please leave all bags and phones in the auditorium


Investor Day Agenda

08:30 Presentations





10:45 Q&A


13:00 Buffet Lunch


Date post:	11-Mar-2021
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Smiths Interconnect Investor Day · 2019. 9. 16. · Smiths Interconnect: providing specialist...

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